Everything’s on sale!

For all of 2014, New England grocery chain Market Basket is discounting every item, every day by 4%.

“The additional 4% off promotion is a reward for its loyal customers and an investment toward a long-term growth strategy to attract new customers, increase sales, and continue to strengthen and build Market Basket’s brand identity,” said a press release from the company.

I can’t think of any past examples where such a discount has been offered for such an extended period of time.

Of course, there is an interesting back story about the feuding Demoulas family, with two factions, each led by a cousin named Arthur Demoulas (Arthur T. and Arthur S.).  This is probably relevant.  It’s also probably relevant that supermarket competition in the Boston area is about to increase, with a new Wegmans opening this month and more planned.

But I’m more curious to see if this year-long discount is going to be an effective sales technique.

Modest increase in sales

In some early (and generalized results), sales are up modestly and outpacing the overall market.  And in the competitive supermarket industry, a modest increase is a good increase.

Interestingly, prices are also up modestly.  It seems that Market Basket raised its average prices in advance of this discount offer (or is selling more expensive items, on average, but more likely that average prices increased). Even with this increase, there is still a healthy discount being offered across the board, but it’s interesting to see the dynamic.

I’ll be continuing to watch this bold strategy throughout the rest of the year. Will it result in sustained sales and share gains?

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